Salman Rushdie, with a little help from Her Majesty, has again clarified the battlelines on which we stand. Because Britain is honouring him for what he has written, he is again being threatened with death. An Iranian organisation has offered a reward of some £80,000 for his murder. Pakistan's religious affairs minister, Muhammad Ejaz ul-Haq - the son of the former military dictator Zia ul-Haq - told his country's national assembly that a suicide bombing could be justified as a response. Almost as grotesque was the reaction of a British Muslim peer, Lord Ahmed of Rotherham, who expressed his outrage at "honouring the man who has blood on his hands". White-is-black thinking of an almost Orwellian kind, this turns the victim into the murderer.

The issue here is not whether Rushdie's writing merits a knighthood, nor whether leftwing, cosmopolitan writers should accept honours from Her Majesty. (My answers, by the way, are "yes", and "why not?") The issue is whether people should be killed, or face a serious threat of being killed, for what they say or write; and whether a sovereign, democratic state should censor its recognition of its citizens in the face of such intimidation. On this there can be no compromise, no ifs or buts. All our individual solidarity, all the necessary resources of the state, are called for at such a moment. Although this did not seem uppermost in the minds of the committee that recommended the award, when the Queen taps Mr Rushdie on the shoulder with her ceremonial sword and says "Arise, Sir Salman", she will now be striking a regal blow for free speech.

The right to free speech is not unlimited. In determining its limits, context matters. The American judge Wendell Holmes famously observed that a man should not be free to shout a false alarm of "Fire!" in a crowded theatre. Now the fact is that even if a secular liberal intellectual were to say "Mad Mullah X deserves to be shot", the likelihood of someone shooting Mullah X as a result is close to zero. So far as we know, there are no al-Darwinia brigades making bombs in secret laboratories in north Oxford, awaiting an order from their beloved Imam Dawkins to assassinate Mullah X. If, however, a Muslim cleric or intellectual says "Salman Rushdie deserves to be shot", there are people who may take it literally. Remember that Rushdie's Japanese translator was murdered, his Italian translator stabbed and his Norwegian publisher shot because Ayatollah Khomeini had called for everyone involved in publishing The Satanic Verses to be punished.

Because of this explosive context, Muslim speakers need to exercise a particular care in their choice of words. But we non-Muslims need, in return, to be generously clear about the distinction between what a free society requires of them and what we merely desire. We may desire that they abandon what we regard as outmoded superstitions, "see reason", become modern, liberal, secular. But, in a free society, nobody should require that of them. The toleration of widely differing opinions and beliefs is precisely what distinguishes a free society from the ideological regimes of the Middle East. Rushdie wrote a fiction that was deeply offensive to many Muslims. Muslims have the right to be deeply offensive back. All that a free society requires of them - as of every citizen - is that they conduct this argument peacefully and obey the law of the land.

I note with appreciation and respect how a growing number of British Muslims, including some who burned Rushdie's books back in 1989, are now standing firmly on this line. I will be the first to defend their right to articulate their beliefs in ways that may be as offensive to an atheist as Rushdie's novel was to them. In a free society, we don't have to agree. We only have to agree on how we disagree.